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Trade, Jobs and The Ongoing Struggle

Following is a comment I left following this post at Brad DeLong’s blog. (Of course, what I’m posting here is edited, selected, massaged, even tortured to make me look better.)

Responding to a claim that ‘…Americans are told that trade destroys jobs…’.:

“I don’t know what is gained by misrepresenting the positions of people opposed to the current trade situation! Who is telling Americans that? NO ONE IS.

What I hear people saying is that trade with countries that do not honor their agreements, and/or countries that do not permit labor to organize or that do not allow their citizens to vote on their country’s policies or do not have environmental regulations, etc. is inherently stacked against OUR interests AS WELL AS the interests of the people in the countries we trade with. And it is not harming JUST the interests of Americans who lose their jobs but also the interests of our country as a whole. How do we benefit by trading away our jobs, assets, manufacturing base, technological expertise and revenue base, to trade partners who are not purchasing enough from us, not paying their own citizens well, not protecting the environment, not letting workers organize, not letting their citizens vote, not floating their currency so their goods cost what they should relative to ours, etc.?

Ultimately this is about more than trade, it is the ongoing struggle over who gets what share of the pie. Of course corporations will always try to lower costs. They should. But this can mean trying to repeal the minimum wage, or use child labor, or bribing inspectors. So it’s up to us, the people, to try to put in place controls that protect the public interest. It is our duty. Is it ‘protectionist’ to support a higher minimum wage, or national health insurance or worker safety regulations, or the right to unionize? YOU BET IT IS! It protects the people who work for a living. Here AND with our trading partners.

Without worker protections in place in countries like China, and without agreements in place that mean that our trade “partners” REALLY DO balance out our job losses by purchasing US goods, and by allowing their currencies to follow the market, it is NOT A LEVEL PLAYING FIELD. It is NOT “FREE” TRADE AT ALL! All we are doing is trading away American living standards, increasing our debt, to enrich corporate executives and corrupt Chinese officials!

“Protectionism” means PROTECTING AMERICANS. A $500 billion trade deficit indicates a problem with our idea of “free trade,” doesn’t it? Stagnant income growth for the middle class since the 70’s indicates a problem, doesn’t it? With the trade portion of the struggle between moneyed interests and the public, we are trading away jobs and assets in return for loans. The public takes on the trade debt load and the executives walk away with the cash. With other forms of this struggle, like the minimum wage and the right to organize, we are experiencing the corruption of our own political system, trading away our retirement income for tax cuts to the rich, and other signs that the public’s position in this ongoing battle is weakening…

The trade situation is just another part of that battle – it’s the scene in ‘Grapes of Wrath’ where they’re bussing in the strikebreakers so they can keep wages low. It’s just that they’re bussing them over the border now.

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Let me add to that. Show me where the current trade arguments are different from the minimum wage arguments? They argue that raising (or even having) a minimum wage keeps the poor from getting jobs. And they argue that asking trade partners to protect workers rights and safety and pay higher wages keeps THEIR poor from getting jobs.

But, in fact, history shows that increasing the minimum wage and other income redistribution policies precedes higher growth, not lower growth. And periods of wealth concentration coincide with periods of lower growth. This is a consumer economy and customers with money to spend grows the economy. Clinton’s tax HIKES and minimum wage HIKES and EITC (Earned Income Tax Credit) HIKES brought about a boom.

So policies that promote higher wages and income redistribution benefit everyone, and policies that reduce wages and concentrate wealth promote that “race to the bottom.” Policies for labor OUTSIDE the country have the same effect as those for labor IN the country. Promoting workers rights increases growth, and benefits all of us.”